Prudential Assurance is launching a property fund that aims to capitalise on soaring commercial property prices and yields. The new PruLink Global Property Securities Fund will be on offer until May 2007 at an offer price of S$0.95 to S$1. The fund targets mainly a Singaporean retail base looking to diversify from equities and bonds.

Prudential Asset Management is the investment manager and LaSalle Investment Management is the underlying portfolio manager. In February, LaSalle helped launch an open-ended Asia property fund as sub-advisor to Prudential Property Investment Management (PruPim), a unit of Prudential Assurance, and it has also run segregated accounts for the insurance company. The PruPim property fund concentrates on core and core-plus physical property investments, so whilst LaSalle is involved in both offerings, the former was a different kind of product from this new fund, which in many ways might be described as a fund of Reit funds.

Asset allocations will concentrate on global real-estate investment trusts, which will account for 85% of investments, with the remainder real estate-related securities. The fund will have a strategic focus on commercial real estate, in addition to giving investors insurance coverage.

Expected annual returns are 10-13% over next three years, with an expected dividend yield exceeding 3.2%. The fund is targeted to grow to $100 million by the end of 2007.

The fees for the fund are dependent on the insurance policy, in the form of investment-linked plans, which are bought by investors. These will depend on the level of insurance coverage for eventualities such as death or illness. Typically, fees will be 5% bid/offer spread and a 1.5% annual management charge.

Prudential Singapore has $6 billion under management and is one of the countryÆs biggest life insurance companies. The portfolio manager La Salle Investment Management is a global real-estate investment manager with $10 billion in assets under management.